Increasing consumer spending in speciality stores is driving the success of the Charter Hall Retail REIT fund, the property group reports.
Rents from speciality stores grew two per cent in the nine months to 31 March 2015, with new leases and renewals contributing equality to the result, the fund reported.
Across Australia, speciality shop sales grew at 2.5 per cent in the first quarter of 2015, up from 2.1 per cent at 31 December 2014, which fund manager, Scott Dundas, said highlighted the improving local retail markets.
The fund has also moved to restructure its debt funding platform through a US Private Placement issuance of US$200 million, which will increase the REIT’s weighted average debt maturity from 3.1 years to six, and reduce its weighted average debt margin from 177 basis points to 155 basis points per annum.
“The REIT has continued to deliver solid results during the third quarter, reflecting the strength of the non-discretionary retail sector,” he said.
“During the period we have actively addressed the REIT’s debt funding platform and continued to enhance the quality of the portfolio through strategic divestments and redevelopments.”
While consumers’ non-discretionary spending saw a steady increase across the country, anchor tenants in the resource states of Queensland and Western Australia were impacted during the period, recording turnover growth of 1.6 per cent, while the fund’s anchor tenants in the other states and territories reported average growth in turnover of three per cent.
